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The time is ripe—if not for the full-blown revolution, then at least for a transformative backlash to recenter the imperatives of social justice that have lately become so attenuated.

ZAGREB, CROATIA—What is often described in media, political and financial circles as the global “debt crisis” actually poses even more insidiously widespread dangers than the ubiquitous doom-filled reports commonly inform. “The greatest catastrophe threatening Greece and Europe is not the economic crisis,” says Costas Douzinas, professor of law at Birkbeck, University of London, “but the total destruction of the social bond, the way we see ourselves, the way we see our relation to the community. This is long-term. Economic crisis, fiscal deficits, can be restored in the medium term. But once you lose the social ethos, then there is no way back.”

That was the takeaway in May as scholars, writers, politicians and activists came together at Zagreb’s sixth annual Subversive Forum to plumb the depths of the current malaise, but also to propose remedies for the five years of European economic upheaval that has produced personal hardship, civic unrest, governmental instability and a general sense of paralysis.

For two weeks every year, Zagreb’s civic festival welcomes hordes of progressive lecturers and audiences to a program of films, debates, roundtable discussions and protest-planning sessions. Running past midnight in the city’s elegant 1920-vintage movie house Kino Europa, standing-room-only keynote speeches attract staunch partisans for advancing the interests of the public sphere against the authoritarian mediocracy that now prevails.

The cataclysm of human and social devastation in Europe is this generation’s defining moment. But calling it a debt crisis, as Greek economist Yanis Varoufakis explains, is like going to the hospital with advanced inoperable cancer and having the doctor diagnose your suffering as a pain crisis.

Yes there is pain, but the pain is symptomatic of bigger problems. The “debt crisis” is also a food crisis—people can’t afford to buy enough to eat. It’s a housing crisis, an education crisis, an unemployment crisis, an immigration crisis, a human rights crisis. In Greece, the New York Times reports, prostitution has surged 150 percent in the last two years as a direct result of social desperation, with supply-and-demand dynamics driving prices for sex work as low as five euros.

The Left rightly rejects austerity, despising it as collective punishment of citizens who had nothing to do with the financial collapse. Public health scholars David Stuckler and Sanjay Basu explain in The Body Economic: Why Austerity Kills that such spending cuts drastically lower life expectancy due to a higher prevalence of suicide, HIV, alcoholism, heart disease and depression.

Underlying all these other crises is the steady transformation of the over-bureaucratized European Union into a democracy-free zone. Voter turnout is in decline (especially for European Parliament elections, but also in national contests), as constituencies manifest apathy or disenfranchisement. Decisions that people should be able to make for themselves and that are consequential for their lives—how much society spends on healthcare, on education, on defense—emanate instead from afar by EU administrators. A “Merkiavellian” regime, some call it; a secular empire of finance.

The principles of democratic self-determination are hamstrung by the powerful Troika—the International Monetary Fund, the European Central Bank and the European Commission (the EU’s legislative and operational council)—which a disempowered citizenry increasingly views as an automaton that squelches democracy as it protects the interests of the power elite.

A teachable moment

But as many Europeans grow resigned to the “new normal,” a passionate movement of social democrats and subversive activists aims to recast a fatalistic narrative of inevitable capitulation. From the rubble of this financial catastrophe, they are extrapolating a systemic critique of how this mess came to pass and more importantly, how to use the collapse as a teachable moment. The time is ripe—if not for the full-blown revolution, then at least for a transformative backlash to recenter the imperatives of social justice that have lately become so attenuated.

The EU had been promoted as a strong “single market” (by many reckonings, the world’s largest economy) that would defuse Europe’s centuries of conflict: shared economic prosperity would generate cooperative unity. But clearly the EU has not delivered the promised transnational harmony. Capitalism is, after all, inherently a competition, which means there are winners and losers. Labor, always a weak player in this competition, loses the most in a race to attract foreign investment. Consequently, the labor movement fears a descent into what Slavoj Žižek calls a tyrannical “capitalism with Asian values.”

“Peripheral countries,” a label that has become so prevalent in the EU discourse, typifies the fault lines in the “union.” At the Subversive Forum, I noticed how keenly language highlights these tensions and fissures. Not surprisingly, people don’t like being thought of as peripheral—a lesson that might have been learned in light of the offense that the “third world” has always felt about that similarly condescending term. They also don’t appreciate being called PIIGS, the acronym that lumps together Portugal, Ireland, Italy, Greece and Spain (the extra “i” doesn’t soften the blow). The term is outdated anyhow as more countries slide into severe downturns. With France and the United Kingdom falling into recession and Cyprus imploding, we can expect even coarser acronyms in the future.

It’s not just about nomenclature. The discourse of “othering” reveals old and supposedly effaced neocolonialist prejudices at their worst. In the minds of those who oppose humane terms of support, the “pigs” are lazy and corrupt, unsophisticated and out of date. They have brought their troubles on themselves and forced austerity will do them good.

The idea of Europe and even the word itself, has become toxic, unstable; co-opted by the bureaucrats’ failed vision, nobody knows exactly what it means. Is the UK in Europe? What about other EU but non-Eurozone countries—like Poland or Sweden? Is Iceland, the canary in the coal mine for financial meltdown, European? Euro-Asiatic hybrids such as Russia and Turkey? Non-EU countries like Norway and Switzerland? Can a country be expelled from Europe?

“Europe” is uttered with a sneer or a spasm of abjection. “Euro,” which once denoted simply a strong cosmopolitan currency, is now a root that has spawned a more cynical vocabulary: Eurocritic, Euroskeptic, Europhobe. But if the establishment’s lexicon is becoming degraded, the radical retorts are more fiercely honed. “Union” and “unity” have been exposed as feckless in the face of European inability to sustain these, inspiring a more rousing synonym, “solidarity,” that resounds among those who are focused on social equality rather than financial technicalities. Paradoxically, the counter-rhetoric of the Left has expanded the context of the crisis by contracting the terminology. What was originally construed as “the global economic crisis” morphed into “the Eurozone crisis,” or “the Eurocrisis,” then became more tightly compressed into “the crisis,” and finally—stripping away everything else to convey simply a primordial vortex of personal agony and social decrepitude—the definite article dropped off, leaving just “crisis.”

“Crisis” has mobilized a radical critique of European capitalism. It’s not as simple as debating whether countries should leave the EU, or the euro—as bad as things are now, the alternative is probably catastrophic. But the Left has embarked upon a deep analysis of what sort of society has grown out of the EU’s financial autocracy. “Criminals, disguised as statesmen, were robbing us blind,” says Slovenian poet and critic Aleš Debeljak. “Crisis made us realize this truth.”

The radical mission is to uncover and expose the roots of this incompetence and institutional corruption, to question the motives and hidden agendas lurking beneath the “bankruptocracy” (another salient coinage), to educate and motivate suffering masses, and to reform the system.

“We can’t leave economic issues to the experts any longer,” says Maja Breznik, from the Slovenian Peace Institute. “It’s time for amateur investigations.”

These investigations, an end-run around the self-interested strategies of bankers and other EU cronies, begin from the premise that the vicious circle of debt is not the fault of immoderate spending by governments or households. Instead the primary goal of “recovery” has been a non sequitur: protecting the interests of private moneylenders and multinationals and refilling their coffers after their financial miscalculations and chicanery. The problem as it is being addressed bears little relation to the actual predicament, so society has plunged into deep recession.

As Europe tries to emerge from crisis, an exclusive focus on debt represents a class struggle designed by financiers to transfer losses from their books on to the taxpayers. Troubled countries are forced to sell off their economies to foreign investors. The Troika arranges bailouts under the harshest terms, with the heaviest burdens borne by agencies that support public welfare, because reducing social spending allows countries to pay more money, more quickly, back to the banks.

Privatization of the commons en- sues: everything that can be liquidated is sold, then rented back to the most disempowered classes. Much of the population is perpetually indebted and the idea of “permanent work” becomes a rarity, replaced by piece-work, part-time work and frequent lay-offs. The social contract has been broken.

We “amateur investigators” must ask questions about real value, as opposed to the merely monetary expressions of value that the Troika fetishizes. It seems reasonable to proclaim “bankrupt” (figuratively and literally) the discourse of valuation that culminated in the exotic, abstruse financial products that precipitated the crash.

It is our turn to open the discussion of what is valued from the perspective of the victims of fiscal malfeasance. (By “us” I refer to non-bankers, non-wealthy, non-functionaries and for good measure a healthy cadré of academic fellow travelers.) GDP itself is a subjective measure of value, a war-accounting mechanism that is not the only way to count. A euro is not just a euro: not every use of money is equally valuable. A different model of social accounting—one that focuses on the bottom, the workers, the poor and middle class, and starts with wages, taxes, social security—will produce a very different economic narrative than the one that has predominated for the last five years.

“We demand a new right,” argues Franco “Bifo” Berardi, a Marxist scholar from Milan’s Academy of Fine Arts, “The right to insolvency. We are not going to pay the tax. If I am insolvent, I don’t have money, so I won’t pay the debt.” Instead, there should be a moratorium on interest payments, some debt should be canceled and some repaid with a growth clause (as Germany did in the 1950s). Countries would pay as they grow, and as they can afford it.

Žižek—the Subversive Forum’s patron saint since its inception—warns that the radical Left has historically had a proclivity to sit on the sidelines: “They prefer sometimes not to take power so that when everything goes wrong they can write their books explaining in detail why everything had to go wrong. There is some deeply rooted masochism of the radical Left. Their best books are usually very convincing stories of failure.”

But today there is an especially high onus to take action, to engage in political reform. Leftist activists and politicians do have a concrete agenda for fixing the crisis. In Greece, defying the eulogies of democracy, Alexis Tsipras’ Syriza coalition has shown impressive strength in the last few elections and stands within grasp of parliamentary victory and a majority coalition in the near future. Nearly destroyed by crisis, Greece may soon emerge as the most advanced site of resistance. “The future of Greece is the future of Europe,” Tsipras proclaims, providing a heartening reverberation for the slogan that protestors chant across the continent, “Nous sommes tous des grecs”: We are all Greeks.

The Left’s challenge is to reorganize in a more cooperative, collective way: reclaiming the commons, reappropriating the wealth that is now in the hands of the state and the banks, and reconstituting the social fabric that was destroyed by economic restructuring.

Political platforms like Syriza’s draw on a wealth of theoretical foundations and strategic visions for reform.

Erik Wright, a University of Wisconsin sociologist who wrote Envisioning Real Utopias, is one of many academic subversives who offered Zagreb audiences a sophisticated array of fresh ideas for transcending the status quo of capitalism and replacing it with an emancipatory alternative, a democratic egalitarian pathway that empowers people to take control of their own destinies. Wright described a range of innovations that can be introduced “inside of capitalism” but that embody non-capitalistic principles and more fully reflect the values of democracy: worker-owned cooperatives, participatory budgeting (where citizens help determine civic priorities), freely provided public services like transportation and libraries (which we can think of as anti-capitalist ways to give people mobility and books), and unobstructed access to the commons of intellectual property. Peer-to-peer collaborations like Wikipedia illustrate how a non-capitalist means of production can flourish within capitalism and ultimately displace capitalism altogether (as evidenced by the recent demise of the print edition of that imperialist icon, the Encyclopedia Britannica).

Urban farms organized through community land trusts can support food production divorced from agribusiness. Crowd-sourcing finance like Kickstarter sidesteps the entrenched hegemonies of cultural production. The gift economy in music from the Internet allows people to download songs for free and pay whatever they want. (Wright believes these musicians actually make more income than they would in a conventional sales model because they have created a more palatable moral economy with their fans.)

The crisis of capitalism offers, as a silver lining, the opportunity for us to reconceptualize more democratic and sustainable systems of social and commercial existence. It’s a moment that is uniquely receptive to new ideas, as the old ones have proven so worthless. A subversive smorgasbord can be created in the world as it is, prefiguring things that might be in the world as it could become. Are these just utopian fantasies? A questioner at Wright’s lecture asked whether a smattering of such small-scale interventions could really inspire fundamental social change, to which the sociologist responded sublimely: “We don’t know for sure. The day before Wikipedia was invented, it was impossible.”

ABOUT THIS AUTHOR

Dr. Randy Malamud is regents’ professor and chair of the department of English at Georgia State University. He is the author of eight books, including Reading Zoos: Representations of Animals and Captivity (NYU Press, 1998) and An Introduction to Animals and Visual Culture (Palgrave Macmillan, 2012). He can be reached at rmalamudgsuedu.

Engineer Duje Kovai, who has worked in the shipyard at Split for 40 years, asks: “Why does Europe want to stop Croatia building ships?” He has no answer. The country has a long coastline and history of sailors, fishermen and shipbuilders, but EU membership will probably put an end to one of its oldest industries. The yards had to be completely privatised before Croatia officially joined the EU on 1 July.

Croatia had five shipyards, dating back to the 19th century: Uljanik in Pula, and 3-May at Rijeka, Kraljevica, Trogir and Split. They were the economic backbone of the coastal regions. Ships built in Yugoslavia used to sail the world, and for decades Dalmatia’s shipyards rivalled those of Trieste and Saint-Nazaire. Shipbuilding was key to the political imagination of the socialist years: Josip Broz Tito had worked as a mechanic at Kraljevica in the 1920s. Split’s history is linked with the shipyard: the famous Hajduk football club — which is to Croatia what Olympique de Marseille is to France — was founded by shipbuilders who joined the Communist partisans when Dalmatia was annexed by the Italian fascists in 1941.The termination of all public subsidies is stipulated in chapter 8 (Competition Policy) of the accession treaty admitting Croatia to the EU, and the European Commission has been monitoring the implementation of the “restructuring” programme. “All over the world, states help shipbuilding,” said Zvonko Šegvi, president of Split’s shipbuilders’ union. “In Italy, the Fincantieri shipyards are entirely in public hands; in France, the state is still a minority shareholder in the biggest yards such as STX-Chantiers de l’Atlantique. Even in South Korea, the world leader in naval construction, the state subsidises shipbuilding. What’s acceptable in every other country is forbidden in Croatia in the name of European integration.”

A few months before EU accession, the state put its shipyards up for sale. But this proved more difficult than expected: debts were underestimated and some potential buyers were put off by the requirement that they shoulder 40% of restructuring costs. Kraljevica didn’t find a buyer and went under. Only the privatisation of the small site at Trogir seems a comparative success: one pier will be turned into a marina and chandler’s yard, and shipbuilding will continue. It was bought by a Croatian businessman, Danko Konar. The state will contribute €60m ($80m) to its restructuring over five years, and the agreement includes cutting the workforce from 1,200 to 900. Slavko Bilota, an engineer, hopes though that as older workers retire new ones will be taken on.The yards in Split were purchased by the DIV group for the nominal sum of 500,000 kunas ($88,600). DIV, which is owned by the businessman Tomislav Debeljak, has not put forward any serious plan for getting them back in operation, and announced in June that almost all of the 3,500 workers would be laid off: 1,500 of these will be rehired on short-term contracts, but the selection criteria are unclear. DIV has also promised to recruit 500 former employees, also on temporary contracts.

Split is not going down without a fight, and DIV has brought charges against union leaders for alleged acts of violence and has had them banned from the site.The identity of Istria is likewise inextricably linked to the Uljanik shipyard at Pula. In this tiny region of 200,000 people, shipbuilding accounts for nearly 30,000 jobs, direct and indirect. Production has continued and the order book is full, despite a reduction in state aid since 2006. Uljanik even made a bid to buy the 3-May shipyard in Rijeka. But the future remains uncertain. The site is attracting attention for its touristic rather than industrial potential: the islet on which the shipyards are located is in the middle of Pula bay, visible from the promenade and the town’s Roman amphitheatre. For now, Pula’s tourist future is focused on Muzil, a former military base built in 1859 for the Austro-Hungarian fleet and used by the Yugoslav then Croatian navies until it was closed in 2007. Pula residents currently stroll, bathe, fish, and picnic on the site, which also hosts alternative festivals, but there are plans to privatise it and turn it into a tourist complex with a 2,500-bed hotel, golf course and marina.

The planned demise of the shipyards will complete Croatia’s deindustrialisation. But can the country rely on tourism? The coastal regions have the highest unemployment, with 22% officially out of work overall, and a third of those under 25. Many young people get by on casual work on the black market, earning as little as $250 a month. Zvonko Šegvi says Croatia is joining the EU “without any real preparation … our economy has been devastated, and all we can do is provide services to the rich countries in the north. In the EU, Croatia is going to be a second-rank country, like all the other states in the south.”

Member countries of the European Association of Hospital Pharmacists (EAHP) have issued a jointly agreed statement expressing apprehension about the impact of public spending austerity on services to patients in hospitals.

Amongst the negative impacts of public spending austerity causing concern to hospital pharmacists are: increasing expectancy placed upon patients to meet the up-front costs of their medicines; the unintended impacts national cost-cutting measures are having in respect of medicines shortage; short-staffing in hospitals; diminished opportunities for healthcare professional training and development; and shrinking investment in areas of patient safety enhancement.

EAHP’s members have called for a European Commission review into the potential for greater joint level cooperation between governments in terms of reducing the detrimental health impacts of austerity measures. Such a review could be conducted in the context of both the pan-European aspects of these problems, and the remit of the European Union to take action in the area of public health, as per article 168 of the Treaty on the Functioning of the European Union.

Speaking about the new policy statement, EAHP president Dr Roberto Frontini said, “Hospital pharmacists, by the nature of our profession, are highly attuned to detecting patient safety threats. So with the impacts of public spending squeezes now keenly felt in almost all European countries, we call for greater caution, care and compassion by policy-makers when it comes to the area of health. Too much progress has been achieved in previous decades to be casually discarded in a rush to resolve macro-economic challenges. Sober analysis must made of the patient safety implications of all decisions, as well as the impacts on sustainable health services.”

Dr Frontini further added, “I see significant potential value that could be delivered by the European Commission taking a proactive role in helping member states navigate the current financial challenges to health systems. Ultimately, we all have a duty to ensure that it is not the sick and vulnerable that pays the price of austerity.”

EAHP is an association of national organisations representing hospital pharmacists at European and international levels.

Transparency International, a non-governmental organization, conducted a poll of 114,000 people in 107 countries on the problem of corruption.

More than 50 percent of the respondents said they believe that global corruption has gotten worse over the past two years.

According to the survey, a lack of ethics – dishonesty – is on the rise almost everywhere. Not surprisingly, “politics” was declared the most corrupt institution in 51 of the countries surveyed, but it has serious competition.

Banking is a major industry infected by corruption. Banks in Ireland, Greece, Spain, Portugal and some other countries, were caught up in the crisis of 2008.

The Irish bank bailouts were the first to hit a European country. Leaked audio tapes and phone conversations of top officials at Anglo Irish Bank revealed that they lied to the government about their bank’s financial condition as the real estate bubble was about to burst. This made it more difficult for the government to respond effectively. The Irish bank bailout has cost Irish taxpayers and the European Union tens of billions of dollars, and Ireland is still in the throes of a severe recession. A similar crisis occurred in the United States, only on a much larger scale.

Without fully understanding the scope and nature of the problem, the U.S. government felt compelled to bailout Wall Street banks, which were deemed too big to fail. The bank bailout probably prevented the U.S. economy, and possibly the world economy, from collapsing into a second Great Depression. Our economy remains weak, and unemployment is too high.

It appears that a culture of greed and a lack of ethics are still alive on Wall Street. Recently, a prominent New York law firm took a survey of 250 Wall Street professionals from dozens of financial companies. The survey revealed that 23 percent of responders “had observed or had firsthand knowledge of wrongdoing in the workplace.” Nearly 25 percent said that they would “engage in (unethical) insider trading to make $10 million if they could get away with it.” One-fourth of respondents also said that pay and bonus structures encourage employees to compromise ethical standards or break the law.

More worrisome, 17 percent of those surveyed expected “their leaders were likely to look the other way if they suspected a top performer engaged in (illegal) insider trading,” and “15 percent doubted that their leadership, upon learning of a top performer’s crime, would report it to authorities.” Overall, “28 percent of respondents felt that the financial services industry does not put the interests of clients first.” Despite these faults, Wall Street banks are getting bigger, and their profits are increasing.

The New York financial industry is operating the same way it did before the crisis of 2008. This shows that reform still is needed.

In order to avoid another bank crisis, Congress should pass a new Glass-Steagall Act, which separates traditional commercial banking from high-risk investment banking.

Most importantly, high moral values and accountability must be restored throughout our society; all of us should examine our conscience and rededicate ourselves to being honest in our dealings with others – especially those of us who are the leaders in politics and finance.

Europe‘s current crisis is more than economic. Between the German government advocating a dangerous austerity policy and European authorities lacking any other suggestions, it is clear that the 2008 financial crisis is no longer solely responsible for the downward spiral of Europe.

One of the main reasons for this current instability in Europe is the evident failure of the European policy authorities when their proposals seem more than enigmatic. Restricting interchange fees as proposed by Michel Barnier, the European Union Commissioner for the Internal Market and Services, is a perfect example of the Commission taking measures that will not haveany concrete impact.

Capping interchange fees, bank charges paid by retailers when they make a card payment, would not only increase personal bank charges [fr], as the banks would want to recuperate the money lost by this cap, but the retailers profit margin will also increase, as they rarely lower their prices just because their costs have decreased.

The other significant issue which has notably accelerated the decline of Europe is the restricted austerity policy which the majority of EU countries have undertaken. It would be more logical for Europe to take inspiration from the countries that have pulled through, i.e. the United States, in order to stimulate the market rather than only focusing on reducing the deficit.

Julio Salazar Moreno, Secretary-General of Spanish worker’s trade union, USO, believes that the countries within the European Union need to stop with the austerity policy [pt], according to online newspaper Público:

Imposed primarily by the German government, salary and retirement cuts, redundancies and privatisations, are not only going to push Greece into a major recession and cause social problems, but its also going to make loan repayments equally impossible.

Emigration figures for Europe are also far from surprising. In two years, 2.5% of the Portuguese population left the country. Who would have said ten years ago that today many Europeans would leave the continent to work in countries like Angola or Brazil?

The fund has rejected complaints from its former chief of mission to Ireland Ashoka Mody who said the austerity policies were doing more harm than good.

It has meanwhile emerged that Ireland will have to remain subject to regular budget inspections for almost two decades despite exiting the bailout this year.

Mr. Mody had said Ireland should consider scaling back its austerity policies. However the IMF says Mr. Mody no longer works for the fund and his views do not represent those of the fund.

The IMF has suggested it wants a full budget package of €3.1 billion in spending cuts and tax increases even if it is more than enough to meet Irish targets.

The Finance Minister has meanwhile confirmed that Ireland will remain subject to Troika inspections for almost two decades.

Michael Noonan says rules agreed by ministers last year will mean Ireland will have regular visits until it has repaid three-quarters of its EU bailout loans. Under our current timetable Ireland will not reach that target until 2032.

The inspections will allow authorities in Brussels to propose possible changes to future Irish budgets long after the bailout programme ends this December.

Europe is haunted by austerity. Public sectors across the European Union (EU) have been cut back and working class gains from the post-war period seriously undermined. In this article, I will assess the causes of the crisis, its implications for workers and discuss the politics of labour in response to the Eurozone crisis.

The underlying dynamics of the Eurozone crisis

Current problems go right back to the global financial crisis starting in 2007 with the run on the Northern Rock bank in the United Kingdom (UK) and reaching a first high point with the bankruptcy of Lehman Brothers in 2008. Two major consequences of the crisis can be identified. First, states indebted themselves significantly as a result of bailing out failing banks and propping up the financial system. Second, against the background of high levels of uncertainty financial markets froze. Banks and financial institutions ceased lending to each other as well as industrial companies. Countries too found it increasingly difficult to re-finance their national debts. The Eurozone crisis, also known as the sovereign debt crisis, commenced.

Nevertheless, this analysis only scratches the surface of the causes of the crisis. The fundamental dynamics underlying the crisis have to be related to the uneven nature of the European political economy. On the one hand, Germany has experienced an export boom in recent years, with almost 60 per cent of its exports going to other European countries (Trading Economics, 10 May 2013). Germany’s trade surplus is even more heavily focused on Europe. 60 per cent are with other Euro countries and about 85 per cent are with all EU members together (de Nardis, 2 December 2010). However, such a growth strategy cannot be adopted by everybody. Some countries also have to absorb these exports, and this is what many of the peripheral countries which are now in trouble, such as Greece, Portugal, Spain and Ireland, have done. They, in turn, cannot compete in the free trade Internal Market of the EU due to lower productivity rates. Germany’s export boom has resulted in super profits, which then require new opportunities for profitable investment. State bonds of peripheral countries as well as construction markets in Ireland and Spain seemed to provide safe investment opportunities. In turn, these investments led to yet more exports from Germany to these countries and yet further super profits in search of investment opportunities.

Who is being rescued?

It is often argued in the media that citizens of richer countries would now have to pay for citizens of indebted countries. Cultural arguments of apparently ‘lazy Greek’ workers as the cause of the crisis are put forward. Nevertheless, this is clearly not the case. Greek workers are amongst those who work the longest hours in Europe (BBC, 26 February 2012). In any case, it is not the Greek, Portuguese, Irish or Cypriot citizens and their health and education systems, which are being rescued. It is banks, who organised the lending of super profits to peripheral countries, which are exposed to private and national debt in these countries. For example, German and French banks are heavily exposed to Greek debt, British banks to Irish debt (The Guardian, 17 June 2011).

What is the purpose of the bailout programmes?

Is the purpose of the bailout programmes to ensure the maintenance of essential public services in Europe’s periphery? Clearly not. On the contrary, the Troika consisting of the European Commission, European Central Bank and the International Monetary Fund (IMF) demands cuts in public finances precisely for services such as education and health care. Is the purpose to assist peripheral countries in re-gaining competitiveness? Again, this too is clearly not the objective. The bailout programmes do not include any industrial policy projects.

The true nature of the bailout programmes is visible in their conditionality, making support dependent on austerity policies including: (1) cuts in funding of essential public services; (2) cuts in public sector employment; (3) push towards privatisation of state assets; and (4) undermining of industrial relations and trade union rights through enforced cuts in minimum wages and a further liberalisation of labour markets. Hence, the real purpose of the bailout programmes is to restructure political economies and to open up the public sector as new investment opportunities for private finance. The balance of power is shifted further from labour to capital in this process. Employers, ultimately, use the crisis in order to strengthen their position vis-à-vis workers, facilitating exploitation.

Are German workers the winners due to the export boom?

In contrast to general assumptions, German workers have not benefitted from the current situation. German productivity increases have, to a significant extent, resulted from drastic downward pressure on wages and working related conditions.

“Germany has been unrelenting in squeezing its own workers throughout this period. During the last two decades, the most powerful economy of the eurozone has produced the lowest increases in nominal labour costs, while its workers have systematically lost share of output. EMU[2] has been an ordeal for German workers” (Lapavitsas et al, 2012: 4).

The Agenda 2010 and here especially the so-called Hartz IV reform, implemented in the early 2000s, constitutes the largest cut in, and restructuring of, the German welfare system since the end of World War II. In other words, Germany was more successful than other Eurozone countries in cutting back labour costs. “The euro is a ‘beggar-thy-neighbour’ policy for Germany, on condition that it beggars its own workers first” (Lapavitsas et al, 2012: 30).

Hence, while the mainstream media regularly portray the crisis as a conflict between Germany and peripheral countries, the real conflict here is between capital and labour. And this conflict is taking place across the EU as the economic crisis is used across Europe to justify cuts. In the UK, although not in the position of countries such as Greece, Portugal or Ireland, people too are faced with constant further cuts and restructuring including privatisations in the health and education sectors as well as attacks on employment rights. In short, across the EU, employers abuse the crisis to cut back workers’ post-war gains. The crisis provides capital with the rationale to justify cuts, they would otherwise be unable to implement.

What possibilities for labour to resist restructuring?

Considering that austerity is a European-wide phenomenon, pushed by Brussels but equally individual national governments, it will remain important that trade unions combine resistance to neo-liberal restructuring at the European level with resistance at the national level. To declare solidarity with Greek workers is a good initiative by German and British unions, for example. Nevertheless, the more concrete support is resisting restructuring at home. Any defeat of austerity in one of the EU member states will assist similar struggles elsewhere.

When thinking about alternative responses to the crisis, short-term measures can be distinguished from medium- and long-term measures. Immediately, it will be important that German trade unions push for higher salary increases at home so that the German domestic market absorbs more goods, which are currently being exported. Along similar lines is the proposal by the Confederation of German Trade Unions (DGB) for an economic stimulus, investment and development programme for Europe. This new Marshall plan is designed as an investment and development programme over a 10-year period and consists of a mix of institutional measures, direct public sector investment, investment grants for companies and incentives for consumer spending (DGB 2013). Neo-Keynesian measures of this type will ease the immediate pressure on European economies. However, they will not question the power structures, underlying the European political economy.

A victorious outcome in the struggle against austerity ultimately depends on a change in the balance of power in society. The establishment of welfare states and fairer societies were based on the capacity of labour to balance the class power of capital (Wahl 2011). Overcoming austerity will, therefore, require a strengthening of labour vis-à-vis capital. As Lapavitsas notes, “a radical left strategy should offer a resolution of the crisis that alters the balance of social forces in favour of labour and pushes Europe in a socialist direction” (Lapavitsas 2011: 294). Hence, in the medium-term, it will be essential to intervene more directly in the financial sector. As part of bailouts, many private banks have been nationalised, as for example the Royal Bank of Scotland in the UK. However, they have been allowed to continue operating as if they were private banks. Little state direction has been imposed. It will be important to move beyond nationalisation towards the socialisation of banks to ensure that banks actually operate according to the needs of society. Such a step would contribute directly to changing the balance of power in society in favour of labour.

In the long run, however, even the change in power balance between capital and labour will not be enough. Capitalist exploitation is rooted in the way the social relations of production are set up around wage labour and the private ownership of the means of production. Exploitation, therefore, can only be overcome if the manner in which production is organised is being changed itself.

Chancellor Angela Merkel said yesterday the ongoing Snowden controversy made clear that EU members should force US companies to explain what happens to user data when it leaves European computer servers

The Government faces pressure from Germany this week to improve oversight of how Irish-based companies like Google and Facebook process data they collect on European users.

Chancellor Angela Merkel said yesterday the ongoing Snowden controversy made clear that EU members should force US companies to explain what happens to user data when it leaves European computer servers. She has ordered her interior and justice ministers to adopt a “strict position” on data protection in Brussels talks on Thursday and Friday of this week and to end a stand-off over new common EU data protection rules.

“We have great data protection laws in Germany but if Facebook is based in Ireland, then Irish law applies,” said Dr Merkel on public television last night. “We wish that companies make clear to us in Europe to whom they give their data. This will have to be part of a [European] data protection directive.”

This turns the spotlight on the Portlaoise-based Data Protection Commissioner (DPC) which has front-line responsibility for policing whether companies based in Ireland adhere to EU data protection rules.

In recent years the DPC has been flooded with complaints from citizens around Europe that Facebook and other technology companies are collating information in violation of EU law.

EU businesses are threatening to terminate relations with American internet providers in response to the National Security Agency surveillance scandal, the European Commission has warned.

Neelie Kroes, Vice President of the European Commission, said that US providers of “cloud services,” a technology that permits clients to store data on remote servers, could suffer steep losses if users fear the security of their material is at risk of being compromised.

“If businesses or governments think they might be spied on, they will have less reason to trust cloud, and it will be cloud providers who ultimately miss out,” Kroes said. “Why would you pay someone else to hold your commercial or other secrets if you suspect or know they are being shared against your wishes?”

The EC vice president then pointed to the “multi-billion euro consequences” facing US internet companies in the wake of the scandal.

“It is often American providers that will miss out, because they are often the leaders in cloud services. If European cloud customers cannot trust the United States government, then maybe they won’t trust US cloud providers either. If I am right, there are multibillion-euro consequences for American companies. If I were an American cloud provider, I would be quite frustrated with my government right now.”

Relations between Washington and Brussels suffered a setback in June when former NSA analyst Edward Snowden leaked details of a top-secret US data-mining surveillance program, known as Prism, which operated both in the United States and the European Union.

Prism is said to give the NSA and FBI user information from some of the world’s largest internet companies, including Google, Facebook, Microsoft, Apple, Yahoo and Skype.

Der Spiegel cited a secret 2010 document alleging that the US spied on internal computer networks in Washington, as well as at the 27-member bloc’s UN office and EU offices in New York.

The NSA paper also allegedly refers to the EU as a “target.”

According to Der Spiegel, the US surveillance system spied on some 500 million telephone and internet recordings in Germany each month, ramping up fears that the United States was not simply collecting data to prevent against acts of terrorism, but was involved in full-scale industrial espionage.

In response to heated European criticism of the US surveillance activities, US President Barack Obama this week seemed to downplay the severity of the situation when he commented: “I guarantee you that in European capitals, there are people who are interested in, if not what I had for breakfast, at least what my talking points might be should I end up meeting with their leaders. That’s how intelligence services operate.”

During a Wednesday phone conversation with German Chancellor Angela Merkel, Obama sought to reassure her that the United States would provide the Europeans with details of their surveillance program.

Meanwhile, in an effort to contain the damage from the revelations, ambassadors to the European Union agreed on Thursday to proceed with EU-US negotiations on a new transatlantic free trade pact, scheduled to open in Washington on Monday.

During the EU-US trade negotiations it will certainly not go unnoticed that crucial European positions in the trade talks may already be compromised due to the wide-scale surveillance. EU officials do not want the issue of America’s covert spy program to be the elephant in the room which nobody talks about.

Dalia Grybauskaite, the president of Lithuania, which takes over the rotating six-month EU presidency this week, said on Thursday that she awaits “information” — not apologies — from the Americans over the spying allegations.

“They are open to co-operation. They are open to explain,” she said. “I never seek an apology from anyone. I seek information … We don’t want to jeopardize the strategic importance of free trade.”

Grybauskaite insisted that the scandal, which has shown no sign of abating, should not be allowed to obstruct the trade talks but acknowledged that “some countries are very sensitive on this question.”

Meanwhile, Britain may also have some explaining to do on the sidelines of next week’s trade talks since it was suggested that the UK’s Government Communications Headquarters (GCHQ), through a system known as Tempora, .

The European Commission vice president said that US companies could suffer from the US government’s covert intelligence-gathering activities.

“Concerns about cloud security can easily push European policy-makers into putting security guarantees ahead of open markets, with consequences for American companies,” Kroes warned. “Cloud has a lot of potential. But potential doesn’t count for much in an atmosphere of distrust.”
________

Robert Bridge is the author of the book,Midnight in the American Empire, which discusses the dangerous consequences of excessive corporate power now prevalent in the United States.

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